If you’re thinking about building or renovating, be sure to tick your implied warranties and insurance items off your checklist

  • Does your building contract identify your warranty rights? Large and small domestic building contracts!
  • Make sure that your builder or tradesperson is registered
  • Is your building work worth more than $16,000? If so, make sure your builder or tradesperson has domestic building insurance in addition to their contractual requirements and warranties (this is to cover you in the event of any fatal accidents, if the builder suddenly disappears or becomes insolvent!)
  • Has your builder or tradesperson given you a copy of the policy?
  • Before you pay a deposit, make sure your builder or tradesperson given you a certificate of currency
  • Your home and contents insurance – do you need extra cover for the building works? Check before works start!
  • Your builder or tradesperson should have a current certificate of public liability insurance – grab a copy

Warranties and consumer guarantees

Under the Domestic Building Contracts Act 1996, “warranties” are the legal requirements that the builder has to meet when they are undertaking building works. These legal obligations are called “consumer guarantees” under the Australian Consumer Law.

You have rights under both building law and consumer law umbrellas, should your building project get rained on. Figuratively speaking.

These legal obligations require the builder or tradespeople to act in certain ways, including:

  • Works to be carried out in a proper and workman-like manner that is in accordance with the plans laid out in the agreement, and with all other legal requirements
  • That works are carried out with reasonable care and skill, and are completed by the time specified in the agreement
  • That ensuring the building materials supplied are in good condition, and suitable for the purposes supplied (unless otherwise agreed to)
  • That the completed works are fit for occupation (for example renovation, extensions, new homes, repair or kit homes)
  • Ensure that any other types of work and the materials utilised are also reasonably fit for their intended purpose

Importantly, these building warranties transfer to a new owner for up to 10 years from the completion of the building works!

What about domestic building insurance?

Recall from the checklist above that builders and tradespeople are legally required to obtain domestic building insurance for their clients when the cost of the building works is over $16,000. This insurance is limited, however it covers costs of up to $300,000 for structural defects for six years (non-structural for two years), and also protects consumers if the builder or tradesperson is unable to finish the building works or tend to defects because they:

  • Passed away
  • Became insolvent, or
  • Disappeared

If the work is not defective, however not complete, claims on the policy may be limited to just 20% of the contract price. Find out more from Consumer Affairs Victoria, or contact us for more information about how we can help with your balustrade building works.